Herbalife Ltd. (NYSE: HLF) reported its third-quarter earnings Monday after the market close as $1.45 in earnings per share and $1.30 billion in revenue. That was against Thomson Reuters consensus estimates of $1.51 in earnings per share and $1.32 billion in revenue. In the third quarter of the previous year, Herbalife reported $1.41 in earnings per share and revenue of $1.2 billion.

The company gave guidance for the fourth quarter in the range of $1.30 to $1.40 in earnings per share and a decline of 5% to 8% in net sales, compared to 2013. The consensus analyst estimates are $1.69 in earnings per share and $1.37 billion in revenue.

Net income for the third quarter was $125.1 million, down from $152.1 million in the same period in the previous year.

Herbalife reported its net sales across its regions:

• $223 million in North America
• $297 million in Asia Pacific (ex. China)
• $204 million in Europe, Middle East and Africa
• $143 million in Mexico
• $205 million in South and Central America
• $181 million in China

Activist investor Bill Ackman has been putting some pressure on Herbalife, as he is been outspoken against the company in his attempt to short it. Ackman has even gone as far to spend $50 million to hire lobbyists and conduct an investigation of the company.

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Herbalife recently announced that Leroy Barnes will be retired from the board of directors. Barnes had served on the board for over a decade and will be replaced by Richard Bermingham as chair of the Audit Committee, effective Tuesday.

Michael Johnson, chairman and CEO of Herbalife, said:

In the quarter we saw volume increases in two-thirds of our 91 countries, especially Russia and China. Excluding the impact of currency translation in Venezuela, the company had solid increases in both volume and net sales. We continue to implement initiatives that we believe will further strengthen our foundation and drive long-term improvements in activity, productivity and retention of our Sales Leaders. We are proud of our members’ ability to grow the business in the short term while embracing changes that we believe will enhance the long-term opportunity.

Pivotal Research initiated coverage of Herbalife with a Buy rating and set its price target at $110 on October 20. The troubled vitamin and supplements retailer also was downgraded to Neutral from Buy at SunTrust Robinson Humphreys following earnings.

Just last week the company settled a civil suit by a former company distributor for $15 million. The suit alleged that the company’s “pyramid scheme” business model did not allow him to make a profit. The U.S. Federal Trade Commission and the FBI are currently investigating whether Herbalife is a pyramid scheme.

The huge foreign exchange impact on sales will get plenty of blame, but as the company adjusts its business model by limiting first orders from customers in China, Russia and parts of Europe, sales and profits slip. The company expects that and says that its experience shows that the changes “position [Herbalife] for even greater future success.” That, plus the investigation overhang, is short-term trouble that could get a lot worse. Investors are going to be cautious.

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Shares of Herbalife closed Monday up 6.5% at $55.90. Following the release of the earnings report, the reaction was negative, and shares opened Tuesday at $47.93. They were down more than 18% to $45.70 in late morning trading.

The consensus analyst price target is $88.00, and the 52-week trading range is $38.63 to $83.51. Herbalife has a market cap near $4 billion.

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